The U.S. dollar traded in a narrow range in Asia on Thursday ahead of new data on the ballooning American trade deficit, a critical concern that has swayed the greenback.
The dollar was trading at 105.59 yen in Tokyo by midafternoon, up 0.20 yen from late Wednesday here but below the 105.68 yen it bought later in New York. The euro rose to US$1.2813 from US$1.2779 late Wednesday and to 135.30 yen from 134.90 yen.
The greenback was mixed against other regional currencies in afternoon trading. It edged up to 1.6490 Singapore dollars from 1.6469 the previous day, and to 38.580 Thai baht from 38.570, while falling to 54.750 Thai baht from 54.91.
The market was focused on the U.S. trade data set to be released later in the day, traders said.
Economists expected the data would show that the U.S. trade deficit narrowed in December. Worries about the ballooning U.S. trade deficit were behind last year's plunge of the dollar.
"The market's looking for concrete evidence to persuade them that the various reasons they had for selling dollars last year, such as concerns over the U.S. deficits and moves by Asian central banks to sell dollars, are no longer relevant," said Masamichi Koike, head of spot foreign exchange trading at Sumitomo Mitsui Banking Corp. in Tokyo.
Since the start of this year, the dollar has recouped some of its losses. U.S. President George W. Bush's budget proposal earlier this week helped reassure the market that Washington may be getting serious about curtailing spending.
But players have been cautious about the dollar's fluctuations. Many aren't sure how durable the dollar's climb will be.
Among the recent comments boosting the dollar were those from Federal Reserve Chairman Alan Greenspan, who played down worries about the current account deficit in a speech in London last week.
The meeting of the Group of Seven industrialized nations, which Greenspan also attended, ended over the weekend with a reiteration of the nations' past stance on currencies. And markets saw that as a sign the participants were relatively content with the dollar's rebound.
Another factor that had previously weighed on the dollar was rife speculation about possible moves toward a revaluation of the Chinese currency, now pegged to the dollar.
Beijing has repeatedly said it's not going to take immediate action on the yuan.
Some players had expected global pressures to grow on China to let the yuan rise, as an overly cheap yuan has been criticized as giving Chinese exporters an unfair edge over American manufacturers -- helping widen the already massive trade gap.